__________________________________________________________________________________
__________________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________________________________________________________
FORM 10-Q
__________________________________________________________________________________
(Mark One)

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2013

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from
to
Commission File Number 33-42498
QUADRANT 4 SYSTEMS CORPORATION
(Exact name of registrant as specified in its charter)
Florida
(State or other jurisdiction of
incorporation or organization)
65-0254624
(IRS Employer
Identification No.)
2850 Golf Road, Suite 405, Rolling Meadows, IL 60008
(Address of principal executive offices)
(847) 871-9450
(Registrant’s telephone number, including area code)
Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports)
and (2) has been subject to such filing requirements for the past 90 days. Yes  No 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  No 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-Q or any amendment to this Form 10-Q. 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule
12b-2 of the Exchange Act.
Large accelerated filer 
Accelerated filer 
Non-accelerated filer 
Smaller reporting company
1

(Do not check if a smaller reporting company)
Indicate by checkmark whether the registrant is a shell company (as defined in Rule 126.2 of the Exchange
Act). Yes  No 
The number of shares of common stock outstanding as of May 15, 2013 was 60,065,071.
2
Table of Contents
TA BLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1.
Item 2.
Item 3.
Item 4.
Financial Statements
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Controls and Procedures
3
3
4
5
6
11
17
17
Part II. OTHER INFORMATION
Item 1.
Item1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
Legal Proceedings
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
Defaults Upon Senior Securities
Mine Safety Disclosures
Other Information
Exhibits
Signatures
18
18
18
18
18
18
19
20
3
Table of Contents
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
QUADRANT 4 SYSTEMS CORPORATION
Consolidated Balance Sheets
March 31,
2013
(Unaudited)
ASSETS
Current Assets
Cash
Accounts Receivables (net of allowance for doubtful accounts of $ 719,753
and $ 603,442 for March 31, 2013 and December 31, 2012 respectively)
Other current assets
Total current assets
Property and equipment - net
Other assets
Intangible assets, net
TOTAL ASSETS
$
$
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses
Note payable - Revolver
Current maturities - long term debts, less debt discount
$
December 31,
2012
(Audited)
243,382
$
86,770
6,661,158
1,119,968
8,024,508
4,267,766
1,199,907
5,554,443
4,815
2,457,114
20,508,192
30,994,629
3,500
2,566,470
9,785,019
17,909,432
5,864,550
4,172,554
1,949,489
$
$
2,962,421
2,857,396
688,891
Total current liabilities
11,986,593
6,508,708
Long term debt less current maturities
Common stock payable
Contingent Earn Outs
Derivative liability
Total liabilities
9,745,646
2,704,423
3,368,750
191,660
27,997,072
7,536,781
1,163,673
249,164
15,458,326
-
-
Stockholders' Equity
Preferred stock - $0.001 par value; authorized: 10,000,000,000 shares:
issued and outstanding: none
Common stock - $0.001 par value; authorized: 5,000,000,000 shares:
issued and outstanding 58,065,071and 54,609,615 at March 31, 2013
and December 31, 2012, respectively
Additional paid-in capital
Note receivable - Stockholder
Accumulated Deficit
Total stockholders' equity
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
See notes to the consolidated financial statements
4
$
58,065
12,760,098
(200,000)
(9,620,606)
2,997,557
30,994,629 $
54,609
11,631,644
(9,235,147)
2,451,106
17,909,432
Table of Contents
QUADRANT 4 SYSTEMS CORPORATION
Consolidated Statements of Operations
Three months ending March
31,
2013
2012
Revenue
Cost of revenue
Gross Margin
$
9,907,455
7,543,851
2,363,604
$
General and administrative expenses
Amortization and depreciation expense
Interest expense
Derivative gain/(loss)
Net loss before Income taxes
Income taxes
Net loss
$
(1,076,519 )
(1,157,072 )
(572,976 )
57,504
(385,459 )
(385,459 ) $
Net loss per common share- basic and diluted
$
(0.01)
Weighted average common shares - basic and diluted
56,964,893
See notes to the consolidated financial statements
5
$
6,727,639
5,316,123
1,411,516
(731,916 )
(1,011,562 )
(432,136 )
(93,330 )
(857,428 )
(857,428 )
(0.02 )
51,740,448
Table of Contents
QUADRANT 4 SYSTEMS CORPORATION
Consolidated Statements of Cash Flows
For the Three Months Ending
March 31,
2013
2012
Cash flows from operating activities:
Net loss
$
Adjustments to reconcile net loss to net cash
provided by operating activities:
Derivative Loss / (gain)
Accretion of interest
Amortization and depreciation
Doubtful accounts
Issuance of Stock for services and interest
Changes in assets and liabilities
Accounts receivable
Other current assets
Other assets
Accounts payable and accrued expenses
(385,459 ) $
(57,504 )
67,221
1,157,072
78,610
(8,811 )
(857,428 )
93,330
41,668
1,011,813
69,977
-
(2,472,002 )
79,939
(39,168 )
1,538,879
322,999
(805,458 )
109,841
24,779
)
Net cash (used in) provided by operating activities
(41,223
11,521
Cash flows from investing activities:
)
Purchase of fixed assets
Acquisition of assets (net of liabilities assumed of $1,832,000, notes payable assumed of
$3,268,000,
contingent payments of $2,900,000 and issuance of common stock of $2,330,000)
(1,565
(1,550,000
Net cash used in investing activities
(1,551,565
)
)
-
Cash flows from financing activities:
Proceeds from sales of common stock
(Decrease) increase in note payable - factor
Payments of long-term debt
Payments of notes payable
Proceeds from long term debt
300,000
1,315,158
(705,758 )
840,000
Net cash provided by (used in) financing activities
(548,110 )
(325,000 )
(140,000 )
-
1,749,400
(1,013,110 )
)
Net increase (decrease) in cash
Cash - Beginning of period
Cash - End of period
Supplemental disclosure of noncash information
Cash paid for:
Interest
Income taxes
Noncash transactions
6
156,612
(1,001,589
86,770
1,079,248
$
243,382
$
77,659
$
$
315,607
-
$
$
576,191
-
Table of Contents
Noncash considerations for acquisitions
$
See notes to the consolidated financial statements
7
5,230,000
$
-
Table of Contents
QUADRANT 4 SYSTEMS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1 –ORGANIZATION AND OPERATIONS
Organization
Quadrant 4 Systems Corporation (the “Company or Q4”) was incorporated in Florida on May 9, 1990, as Sun Express Group, Inc.
and changed its business model and name on March 31, 2011. Q4 operated its business through its two wholly owned subsidiaries,
Q4 Solutions, Inc. and Q4 Consulting, Inc. until December 2012. During the first quarter of 2013, Q4 formed two additional
subsidiaries, namely Q4 Cloud, Inc. and Q4 Mobility, Inc. to launch its cloud and mobile businesses as part of its SMAC (Social –
Mobile – Analytics – Cloud) business strategy.
Operations
The primary business model of the Company is to provide SMAC and IT related technology, products and services. Q4 is building
an integrated platform that provides its clients a unified SMAC solution specific to the Healthcare, Retail and Financial Services
verticals.
NOTE 2 – BASIS OF PRESENTATION
The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting
principles and the rules and regulations under Regulation S-X of the U.S. Securities and Exchange Commission for Form 10-Q, and
should be read in conjunction with the audited financial statements and notes thereto contained in the Annual Report on Form 10-K
for Quadrant 4 Systems Corporation (the “Registrant” or the “Company”) for the year ended December 31, 2012. Accordingly, they
do not include all of the information and footnotes required by accounting principles generally accepted in the United States for
complete financial statements presentation. In the opinion of management, all adjustments, consisting of normal recurring
adjustments, necessary for a fair presentation of financial position, results of operations and cash flows for the interim periods
presented have been included. Notes to the financial statements which would substantially duplicate the disclosures contained in the
audited financial statements for the most recent fiscal year ended December 31, 2012, as reported in the Form 10-K, have been
omitted.
In preparing the interim unaudited consolidated financial statements, management was required to make certain estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures at the financial
reporting date and throughout the periods being reported upon. Certain of the estimates result from judgments that can be subjective
and complex and consequently actual results may differ from these estimates. These financial statements should be read in
conjunction with the financial statements of the Company together with the Company’s management discussion and analysis in Item
2 of this report and in the Company’s Form 10-K for the year ended December 31, 2012. The results of operations for interim
periods are not necessarily indicative of the results to be expected for the full year.
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Consolidated Financial Statements
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Q4 Consulting, Inc.,
Q4 Solutions, Inc., Q4 Cloud, Inc., and Q4 Mobility, Inc.
All significant intercompany accounts and transactions have been eliminated in consolidation.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of assets, liabilities and the disclosure of
contingent assets and liabilities at the date of the consolidated financial statements and revenues and expenses during the reporting
period. Accordingly, actual results could differ from those estimates.
8
Table of Contents
Loss per Common Share
Basic loss per share is calculated using the weighted-average number of common shares outstanding during each period. Diluted
income per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as the
treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each period.
For the quarters ending March 31, 2013 and 2012, there were 12,266,947 and 10,983,614, respectively, potentially dilutive
securities not included in the calculation of weighted-average common shares outstanding since they would be anti-dilutive.
Derivatives
We account for derivatives pursuant to ASC 815. All derivative instruments are recognized in the financial statements and
measured at fair value regardless of the purpose or intent for holding them. We record our interest rate and foreign currency swaps at
fair value based on discounted cash flow analysis and for warrants and other option type instruments based on option pricing models.
The changes in fair value of these instruments are recorded in earnings.
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a
material effect on the accompanying consolidated financial statements.
NOTE 4 – ACQUISITIONS
Teledata Technology Solutions, Inc.
Effective February 1, 2013, the Company acquired the assets of Teledata Technology Solutions, Inc. and its subsidiaries, Abaris,
Inc., Alphasoft Services Corporation and TTS Consulting, Inc. (collectively “TTS”). Upon consummation of the transaction,
whereby the Company acquired certain assets including but not limited to client contracts, trademarks, software technology,
employees and other resources in exchange for: (i) the assumption of certain liabilities of $5,100,000; (ii) cash of $900,000; (iii)
earn-out payments equal to $1,500,000 as defined in the Agreement; (iv) 3,000,000 common shares valued at $1,000,000.
TTS had revenues of approximately $20 million for the calendar year 2012.
Acquisition of Momentum Mobile, LLC
On February 26, 2013, effective February 1, 2013, the Company completed acquisition of certain the assets of Momentum Mobile,
LLC. The assets including client contracts and employees were transferred in exchange for: (i) cash of $400,000; (ii) earn-out
payments up to $800,000 as defined in the Agreement; (iii) 1,000,000 common shares valued at $330,000.
Momentum Mobile had revenues of approximately $1,100,000 for the calendar year 2012.
Acquisition of BlazerFish, LLC
On February 26, 2013, effective February 1, 2013, the Company completed acquisition of certain assets of BlazerFish, LLC. The
assets including client contracts, intellectual property and employees were transferred in exchange for: (i) cash of $250,000; (ii)
earn-out payments equal to $600,000 as defined in the Agreement; (iii) 3,000,000 common shares valued at $1,000,000.
BlazerFish had revenues of approximately $1,500,000 for the calendar year 2012.
9
Table of Contents
The following table summarizes the consideration transferred for the three acquisitions and the estimated amounts of identified
assets acquired and liabilities assumed on the effective date of the acquisitions:
Fair value of consideration transferred from the acquisitions:
TTS
Cash
$
900,000
Common stock
1,000,000
Contingent payments
1,500,000
$
3,400,000
Recognized amounts of identifiable assets acquired and liabilities assumed:
Customer lists intangibles
$
7,650,000
Technology stack intangibles
850,000
Certain accounts payable and accrued liabilities
(1,832,000)
Notes payable
(3,268,000)
$
3,400,000
Momentum
400,000
330,000
800,000
$
1,530,000
$
BlazerFish
250,000
1,000,000
600,000
$
1,850,000
$
$
1,530,000
$
$
1,530,000
$
185,000
1,665,000
1,850,000
$
$
$
$
Total
1,550,000
2,330,000
2,900,000
6,780,000
9,365,000
2,515,000
(1,832,000)
(3,268,000)
6,780,000
Each of the acquisitions include certain contingent consideration arrangements that require quarterly cash payments beginning June
30, 2013 through March 31, 2015 if the respective entity’s revenue run rate (as defined in the agreements) is 75% or more of its
defined base. The range of undiscounted amounts the Company could owe under these arrangements is between $0 and $2,900,000.
The fair value of contingent consideration on the acquisition dates(s) of approximately $2,900,000 was estimated based on the
projected revenues of each asset purchase through 2015. The calculations and projections are based on significant inputs not
observable in the market, which ASC 820 refers to as level 3 inputs. Key assumptions include the maintenance of certain customers
as well as utilizing certain technology across the Company’s existing client base.
The following unaudited proforma summary presents consolidated information of the company as if these business
combinations occurred on January 1, 2013 and includes the amortization of acquired intangibles:
Gross Sales:
$
Net Loss:
$
11,464,408
(492,089)
NOTE 5 – INTANGIBLE ASSETS
Intangible assets consisted of the following:
March 31,
2013
$
7,131,196
5,561,000
5,600,000
175,000
7,650,000
850,000
1,715,000
1,665,000
30,347,196
(9,839,004 )
$
20,508,192
Customer list – Q4 Consulting
Customer list – Q4 Solutions
Technology stack – Q4 Solutions
Technology stack – Empower HR
Customer list – Q4 Cloud
Technology stack – Q4 Cloud
Customer list – Q4 Mobility
Technology stack – Q4 Mobility
Accumulated amortization
10
December 31,
2012
$
7,131,196
5,561,000
5,600,000
175,000
18,467,196
(8,682,177 )
$
9,785,019
Table of Contents
For the three months ending March 31, 2013, the change in intangible assets was as follows:
Beginning of the Year
Additions
Amortization
End of the quarter
$
$
9,785,019
11,880,000
(1,156,827 )
20,508,192
For the quarters ending March 31, 2013 and 2012, amortization expense was $1,156,827 and $ 1,011,563, respectively.
NOTE 6 – NOTE PAYABLE - REVOLVER
As amended in February 2013, the Company entered into an agreement with a financing company providing a revolving line of
credit. Under the agreement, the Company assigned certain accounts receivable, including purchased accounts receivable, to the
financing company in return for a maximum line of credit of $6,500,000. The agreement is automatically renewable on the
anniversary unless cancelled by the parties. Fees under the agreement consist of a commitment fee of $65,000, a service fee of
0.825% per month, and interest at prime (at minimum of 5%) plus 2% per annum.
All borrowings under this revolving line of credit are collateralized by the accounts receivable and substantially all other assets of
the Company.
NOTE 7 – LONG-TERM DEBT
Long-term debt consisted of the following:
Note payable due December 31, 2014, as extended, plus interest at 5% per annum
March 31,
2013
$
1,160,825
December 31,
2012
$
1,153,658
5,430,807
5,850,807
350,000
350,000
679,867
324,624
1,000,000
1,585,500
674,057
314,833
280,730
679,867
364,671
-
Seller note payable due December 31, 2014, as extended, plus interest at 5% per annum
Convertible debenture payable to a finance company due April 1, 2014, plus interest at 16%
per annum
Convertible Debenture payable to a finance company due July 1, 2013, plus interest at 16% per
annum
Note payable due December 31, 2014 plus interest at 15% per annum
Note payable due February 6, 2015 plus interest at 10% per annum (a)
Note payable due May 6, 2014 plus interest at 16% per annum (a)
Note payable due May 9, 2013 plus interest at 16% per annum (a)
Note payable due June 30, 2013 plus interest at 12% per annum (b)
Note payable due June 30, 2013 plus interest at 12% per annum (c)
)
)
Less Discount
Total debts
(106,110
11,695,135
(173,331
8,225,672
Less: Current maturities
Total long-term debt
(1,949,489 )
9,745,646 $
(688,891
7,536,781
)
$
(a)
On February 8th, 2013, the Company issued three separate notes of varying maturity and varying amounts for the purchase
of Teledata Technology Solutions’ assets.
(b)
During the first quarter, the Company borrowed short term funds of $314,833 at the interest rate of 12% per annum to be
retired in full on or before June 30th, 2013.
(c)
During the first quarter, the Company borrowed short term funds of $280,730 at the interest rate of 12% per annum to be
retired in full on or before June 30th, 2013.
11
Table of Contents
NOTE 8 - DERIVATIVE LIABILITY/FAIR VALUE
The derivative liability consists of the following:
Warrants
Conversion feature
Derivative liability
March 31,
2013
$
191,660
-
December 31,
2012
$
249,164
-
$
$
191,660
249,164
The derivative liability related to the outstanding warrants was valued using the Black-Scholes option valuation model and the
following assumptions at March 31, 2013:
March 31,
2013
.72%
440%
0
Risk free interest rate
Expected volatility
Expected dividend yield
December 31,
2012
.72%
449%
0
The derivative liability associated with the convertible debt conversion feature was reviewed by management and the fair value of
the conversion price exceeded the trading value (fair value) of the common stock into which it converts.
NOTE 9 – STOCKHOLDERS' EQUITY
Preferred Stock
The Company's board of directors may designate preferred stock with preferences, participations, rights, qualifications, limitations,
restrictions, etc., as required. No preferred shares are presently designated.
Reserved Shares
As of March 31, 2013, the Company has reserved the following shares of common stock:
Warrants – financing and stock subscription
Conversion – financing
Warrants – Proposed, but unissued, for directors, management and consultants
9,966,944
2,059,734
2,500,000
14,526,678
NOTE 10 – CONTINGENCIES
In July 2012, a claim was made against the Company seeking payment of an "exclusivity fee" and other expenses arising from a
proposed financing in the amount of approximately $500,000. The Company believes that this particular claim is without merit and
intends to vigorously defend this action. The Company has also filed a counterclaim relating to the improper nature of the litigation.
In the normal course of business, the Company may become subject to claims or assessments. Such matters are subject to many
uncertainties, and outcomes, which are not readily predictable with assurance. The Company has insurance to cover such claims.
NOTE 11 – FOREIGN OPERATIONS
The Company’s headquarters and operations are located in the United States. However, the Company does have some key suppliers
and subcontractors located in India. The Company and its management team have no ownership, directly or indirectly, in these key
suppliers and subcontractors. Payments made to India suppliers and subcontractors were $ 970,000 and $1,161,935 for the three
months ending March 31, 2013 and March 31, 2012.
12
Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation
The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this
report.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This Form 10-Q for the quarter ending March 31, 2013 contains forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amending, and Section 21E of the Securities Exchange Act of 1934, as amending. Forward-looking
statements may be identified by the use of forward-looking terminology, such as “may”, “shall”, “could”, “expect”, “estimate”,
“anticipate”, “predict”, “probable”, “possible”, “should”, “continue”, or similar terms, variations of those terms or the negative of
those terms. The forward-looking statements specified in the following information have been compiled by our management on the
basis of assumptions made by management and are considered by management to be reasonable. Our future operating results,
however, are impossible to predict and no representation, guaranty, or warranty is to be inferred from those forward-looking
statements.
The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of
future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a
result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from
and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome
may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those
forward-looking statements. No assurance can be given that any of the assumptions relating to the forward-looking statements
specified in the following information are accurate, and we assume no obligation to update any such forward-looking statements.
Overview
QUADRANT 4 SYSTEMS CORPORATION ("Q4", "we", "us", "our", or the "Company") is a publicly held company engaged in
the information technology sector focusing on the SMAC offerings. The Company was incorporated by the Florida Department of
State on May 9, 1990 as Sun Express Group, Inc. and changed its business model and name in June 2010. Q4 operates four wholly
owned subsidiaries, namely Q4 Consulting, Inc., Q4 Solutions, Inc., Q4 Cloud, Inc., and Q4 Mobility, Inc.
The Company completed certain significant acquisitions in this quarter which are reflected in the accompanying financial
statements. The Company is actively pursuing a business model to position itself as a leader in the SMAC segment of the IT
business.
Business Strategy
Our objectives are to maximize stockholder value and enhance our position as a leading provider of information technology,
consulting and business process outsourcing services. We implement the following core strategies to achieve these objectives:
Growth through Reinvestment: Historically, we have invested significant portion of our profit back into our business. This
investment is primarily focused in the areas of: strengthening and expanding our portfolio of services; developing new technology
platforms and software applications, continuing to expand both sales and delivery organizations; training our technical staff in a
broader range of service offerings; recognizing and rewarding exceptional performance by our employees; and maintaining a level
of resources, trained in a broad range of service offerings, to be well positioned to respond to our client requests, as described below.
Expand Service Offerings and Solutions: We have several teams dedicated to creating technology-based innovative solutions and
developing new, high value services. The teams collaborate with customers to develop these services. For example, we are currently
developing new offerings in Business and IT Consulting and industry-oriented IT solutions atop innovative technologies. We invest
in internal research and development and promote knowledge building and sharing across the organization to advance the
development of new services and solutions. Furthermore, we continue to enhance our capabilities and service offerings in the areas
of CRM, ERP, EIM, Software Testing, Infrastructure Management, industry-oriented BPO services and SMAC technologies.
13
Table of Contents
We believe that the continued expansion of our service offerings will provide new sources of revenue, reduce our reliance on any
one technology initiative and help foster long-term relationships with our customers by allowing us to better serve their needs.
Additionally, as part of our vision to continue our growth and anticipate our clients’ and the markets’ rapidly changing demands in
the near-term, mid-term and long-term, we are investing in emerging opportunities which seek to transform client and user platforms
to internet, cloud and mobile-based experiences.
Research and Development and Competency Centers: We have project experience and expertise across multiple architectures and
technologies, and have made significant investments in our competency centers and in research and development to keep abreast of
the latest technology developments. Most of our technical staff is trained in multiple technologies and architectures. As a result, we
are able to react to clients’ needs quickly and efficiently redeploy our technical staff to different technologies. Also, to develop and
maintain this flexibility, we have made a substantial investment in our competency centers so that the experience gained from
particular projects and research and development efforts is leveraged across our entire organization. Through our investment in
research and development activities and the continuing education of our technical personnel, we enlarge our knowledge base and
develop the necessary skills to keep pace with emerging technologies. We believe that our ability to work in new technologies
allows us to foster long-term relationships by having the capacity to continually address the needs of both existing and new clients.
Growth through synergistic and Accretive acquisitions: We believe that opportunities continue to exist in the fragmented market in
which we operate to expand our business through selective strategic acquisitions, joint ventures and strategic alliances. We believe
that acquisition and joint venture candidates may enable us to expand our geographic presence, service offering and capabilities
more rapidly. For example, in 2012 we completed the acquisition of empowHR Inc., a provider of SaaS based solution for
Healthcare Benefits Administration solutions. This acquisition allowed us to accelerate development of our Healthcare Information
Exchange (HIX) product platform by integrating acquired technologies into our platform. The Company will continue to carefully
evaluate such opportunities available to enter into transactions that will help Q4 accelerate both technology development and client
acquisition to complement its organic growth strategies.
Global Delivery Model: We have a global architecture for service delivery and operations, consisting of employees co-located at
clients’ sites, local or in-country delivery centers, regional delivery centers and global delivery centers. Our extensive facilities,
technology and communications infrastructure facilitate the seamless integration of our global workforces. This is accomplished by
permitting team members in different locations to access common project information and to work directly on client projects. This
infrastructure allows for rapid completion of projects, highest level of quality, efficient use of clients’ technological resources and
real-time access to project information by the on-site account manager or the client. In addition, for large projects with short time
frames, our offshore facilities allow for parallel processing of various development phases to accelerate delivery time.
Highly-Skilled Workforce: Our managers and senior technical personnel provide in-depth project management expertise to clients.
To maintain this level of expertise, we place significant emphasis on recruiting and training our workforce of highly-skilled
professionals. We have built a global delivery organization that include over 1000 technology personnel (both employees and
dedicated/exclusive Q4 consultants),project management personnel and service delivery staff around the world. We also maintain
programs and personnel to hire and train the best available technical professionals. We provide extensive combined classroom and
on-the-job training to newly-hired technical staff, as well as additional annual training programs designed to enhance the business
practices, tools, technology and consulting skills of our professional staff.
Continue to be an Employer of Choice in the Industry: As a rapidly growing professional services firm, a key attribute of our
continued success is the ability to continually hire, assimilate, motivate and retain the best talent possible in the industry. We have
developed strong relationships with key universities around the world, particularly in India, to provide a continual pipeline of
talented staff from Tier One schools. We continue to expand our presence and brand in our key supply markets, further enhancing
our ability to hire experienced professionals from competing IT services firms and industry to support our client needs and growth.
We invest heavily in training programs, motivational programs and career development to ensure personal professional growth for
each of our employees.
Further Develop Long-Term Client Relationships: We have strong long-term strategic relationships with our clients and business
partners. We seek to establish long-term relationships that present recurring revenue opportunities, frequently trying to establish
relationships with our clients’ chief information officers, or other IT and business decision makers, by offering a wide array of
cost-effective high quality services. Approximately 65% of our revenues for the year ended December 31, 2012 were derived from
clients who had been using our services at the end of 2011. We also seek to leverage our experience with a client’s IT systems into
new business opportunities. Knowledge of a client’s processes and IT systems gained during the performance of application
maintenance services, for example, may provide us with a competitive advantage in securing additional maintenance, development
and other projects from that client.
14
Table of Contents
Core Business
We are a leading provider of information technology (IT) products and services, targeted to helping the world’s leading companies
build stronger businesses by leveraging benefits of Social Media, Mobility, Analytics and Cloud (SMAC) technology stack. Our
clients engage us to help them build more efficient operations; provide solutions to critical business and technology problems, and to
help them drive technology-based innovation and growth. Our revenue is primarily generated from sale and licensing of proprietary
technology and Software as a Service (SaaS) Platforms as well as from a wide range of IT services. Our core competencies include:
Business, Process, Operations and IT Consulting, Application Development and Systems Integration, Enterprise Information
Management, Application Migration, Testing and Maintenance, IT Infrastructure Services, or IT IS, and Business and Knowledge
Process Outsourcing, or BPO and KPO. We blend these services with our technology platforms to offer client specific and industry
specific solutions. Our technology platforms and consulting services are tailored for Healthcare, Retail, Financial Services, Logistics
and Manufacturing industry segments. We deliver the solutions utilizing a seamless global delivery organization of over 800 people
located in North America and in India.
Competition
While the Company currently operates in a highly competitive industry, we believe the Company will be able to compete effectively
against well-capitalized competitors that have extensive experience, established distribution channels and facilities by building a
scalable yet robust platform that allows the Company to be responsive to the needs of its customers with quality services with
competitive pricing, a well-developed recruiting and retention model that ultimately provides a successful delivery to the customers.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
The Company is actively executing on its business model which consists of delivery of consulting services in the targeted market
segments. The nature of our model involves engaging employees and consultants to provide services to our customers with billing
accrued and due in normal billing cycles. We incur debt to meet payroll obligations, the largest component of our expenses, and
service debt with the payments received from our customers. Many of our employees and consultants are assisted in the
immigration process which process is an expense component. The Company utilizes few major capital items in the delivery of its
services and requires no significant plant expenses beyond ordinary commercial office space for both use by the employees on a
limited basis and the back-office support for those employees. Our financial statements reflect primarily income from billing for our
consulting services and expenses incurred to pay employees and consultants, including financing to meet payroll in anticipation of
receipt of billing income from customers as well as general administration expenses to manage the Company.
Results of Operations
The revenues and expenses reflect the assets acquired and new businesses acquired during the past two years.
Three months ending March
30,
2013
Increase/
(Decrease)
2012
Percent
%
Revenue
$
9,907,455
$
6,727,639
)
Cost of Revenue
$
3,179,816
47
)
%
(7,543,851
(5,316,123
2,227,728
42
2,363,604
1,411,516
952,088
67
344,603
47
145,510
14
140,810
33
150,834
162
471,969
55
%
Gross Margin
)
General and administrative expenses
(1, 076,519
Amortization of intangible assets
(1, 157,072
)
)
)
%
(1,011,562
)
Interest and derivative expense
%
(731,916
)
(572,976
(432,136
57,504
(93,330
%
)
Derivative gain/(loss)
)
Net loss
$
(385,459
15
%
)
$
(857,428
%
$
Table of Contents
Comparison of Three Months Ending March 31, 2013 and 2012
REVENUES
Revenues for the first quarter ending March 31, 2013 totaled $9,907,455 compared to $6,727,639 of revenue during the same period
in 2012. The increase in revenues of $3,179,816 or 47% over the previous first quarter was primarily due to acquisition of assets
during this quarter. Revenues were comprised of service-related sales of software programming, consulting and development
services.
Revenues were comprised of service-related sales of software programming, consulting and development services.
COST OF REVENUES
Cost of revenue for the first quarter ending March 31, 2013 totaled $7,543,851 compared to $5,316,123 during the same period in
2012. The increase in cost of revenue of $2,227,728, or 42% over the previous first quarter, was due primarily increase in revenues
in the first quarter of 2013. Cost of revenue is comprised primarily of the direct costs of employee and contract labor and related
expenses.
GROSS MARGIN
The increase in gross margin of $952,088, or 67% over the previous first quarter, resulted primarily from increased revenues, the
gross margin percentage increased to approximately 24% from 21% during the same period of 2012.
SELLING, GENERAL AND ADMINISTATIVE EXPENSES
Selling, general & administrative expenses for the first quarter ending March 31, 2013 totaled $1,076,519 compared to $731,916
during the same period in 2012. The increase in selling, general & administrative expenses of $344,603 or 47% over the previous
first quarter was due to increased costs of integrating the acquisitions and building new vertical sales force during the first quarter of
2013.
AMORTIZATION AND WRITE-DOWN OF INTANGIBLE ASSETS
Amortization expense for the first quarter ending March 31, 2013 totaled $1,157,072 compared to $1,011,562 during the same
period in 2012. The increase in amortization expense of $145,510 was due to acquisition occurred during the first quarter of
2013. Amortization periods on the acquired intangibles range from 5 – 7 years.
INTEREST AND DERIVATIVE EXPENSE
Financing and interest costs and derivative expenses for the first quarter ending March 31, 2013 totaled $515,472 compared to
$525,466 during the same period in 2012. The increase in financing, interest costs and derivative expenses of $9,994 or less than 1%
over the previous first quarter.
NET LOSS
The Company reported a net loss of $385,459 for the first quarter ending March 31, 2013 compared to $857,428 for the same period
in 2012. The decrease of $471,969, or 55% over the previous first quarter, was due to increase in revenues, a increase in gross profit
margin, in the current period as compared to the prior period.
16
Table of Contents
EBITDA
Earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the first quarters ending March 31, 2013 and March
31, 2012 is calculated as follows:
March 31, 2013
$
(385,459 )
572,976
(57,504 )
1,157,072
$
1,287,085
Net Loss (GAAP Basis)
Interest expense
Derivative (gain)/loss
Amortization and depreciation expense
Income Taxes
EBITDA
March 31, 2012
$
(857,428 )
432,136
93,330
1,011,562
$
679,600
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) for the first quarter ending March 31, 2013 increased by
$607,485 or 89% over the previous first quarter due to improved performance and acquisition of additional assets.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2013, we had an accumulated deficit of $9,620,606 as compared to $9,235,147 at December 31, 2012. As of March
31, 2013, we had a working capital deficit of $3,962,085 as compared to $954,265 at December 31, 2012.
We have no material commitments for capital expenditures.
Net cash used by operations for the three months ending March 31, 2013 was $41,223 as compared to cash provided by operating
activities of $11,521 for the three months ending March 31, 2012. The decrease in cash used in operating activities in 2013
compared to 2012 was primarily due to increase in revenue and accounts receivable during three months period ending March 31,
2013.
Net cash used for investing activities was $1,551,565 for the three months ending March 31, 2013 compared to nil during the same
three months ending March 31, 2012. The increase was primarily due to acquisition of assets.
Net cash provided in financing activities for the three months ending March 31, 2013 was $1,749,400 as compared to cash used
$1,013,110 for the three months ending March 31, 2012. The increase in cash provided in financing activities in 2013 compared to
2012 was primarily due to equity contribution and additional debt.
Liquidity. The Company is continuing to expand its IT business operations through acquisitions and organic internal
growth. Acquisitions of target company assets will require additional financing. Currently the Company anticipates that additional
financing to fund these acquisitions of assets will be provided by sales of stock or borrowings. Also, the Company is exploring
alternatives for its trade receivable factoring which carries a very high interest rate. Refinancing of this receivable factoring
financing will reduce the Company’s interest expenses thereby increasing the Company’s liquidity position.
The Company is currently discussing with the lenders whose loans are coming due to extend their terms. The Company believes its
resources are adequate to fund its current operations for the next 12 months.
Off Balance Sheet Arrangements
There are no off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital
resources that are material to investors.
17
Table of Contents
Impact of Inflation
We believe that inflation has not had a material impact on our results of operations for the three months ending March 31, 2013. We
cannot assure you that future inflation will not have an adverse impact on our operating results and financial condition.
CRITICAL ACCOUNTING POLICIES
A summary of significant accounting policies is included in Note 3 to the unaudited financial statements included elsewhere in this
Report and in Note 2 to the financial statements included in our Annual Report filed under Form 10-K for the year ending December
31, 2012. We believe that the application of these policies on a consistent basis enables us to provide useful and reliable financial
information about our operating results and financial condition. The following are a summary of the significant accounting
estimates and policies that we believe are most critical to aid in fully understanding and evaluating our reported financial results.
Critical Accounting Estimates and Policies
General
The Consolidated Financial Statements of the Company are prepared in accordance with U.S. generally accepted accounting
principles, which require management to make estimates, judgments and assumptions that affect the reported amounts of assets,
liabilities, net revenue and expenses, and the disclosure of contingent assets and liabilities. Management bases its estimates on
historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other
sources. Senior management has discussed the development, selection and disclosure of these estimates with the audit committee of
our Board of Directors.
An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters
that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the
estimate that are reasonably likely to occur could materially impact the financial statements. Management believes the following
critical accounting policies reflect the significant estimates and assumptions used in the preparation of the Consolidated Financial
Statements.
A summary of significant accounting policies is included in Note 3 to the consolidated financial statements included elsewhere in
this Report. We believe that the application of these policies on a consistent basis enables us to provide useful and reliable financial
information about our operating results and financial condition. The following are a summary of the significant accounting
estimates and policies.
Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and the disclosure of
contingent assets and liabilities at the date of the consolidated financial statements and revenues and expenses during the reporting
period. Accordingly, actual results could differ from those estimates. We have made estimates for doubtful accounts of accounts
receivable, fair values of our customer lists and the estimated useful lives for the amortization of our customer lists. Management
believes that the accounting estimates employed and the resulting balances are reasonable; however, actual results may differ from
these estimates under different assumptions or conditions. The most significant accounting estimates inherent in the preparation of
our financial statements include estimates as to the value of customer lists and other intangible assets, values which are not readily
apparent from other sources.
Fair Value of Financial Instruments. The Company considers the carrying amounts of financial instruments, including cash,
accounts receivable and accounts payable and accrued expenses to approximate their fair values because of their relatively short
maturities and notes payable.
Accounts and Unbilled Receivables. Accounts and unbilled receivables consist of amounts due from customers. The Company
records a provision for doubtful receivables, if necessary, to allow for any amounts which may be unrecoverable, which is based
upon an analysis of the Company’s prior collection experience, customer creditworthiness and current economic trends.
18
Table of Contents
Intangible Assets. Intangible assets are recorded at fair value and amortized on the straight-line method over the estimated useful
lives of the related assets. The carrying value of intangible assets are reviewed for impairment by management at least annually or
upon the occurrence of an event which may indicate that the carrying amount may be greater than its fair value. If impaired, the
Company will write-down the intangible assets for such impairment. In addition, the useful life of the intangible assets will be
evaluated by management at least annually or upon the occurrence of an event which may indicate that the useful life may have
changed. Customer lists were valued based on management’s forecast of expected future net cash flows, with revenues based on
projected revenues from customers acquired and are being amortized over five years.
Revenue Recognition. Revenue is recognized when it has persuasive evidence of an arrangement, the fee is fixed and
determinable, performance of service has occurred and collection is reasonably assured. Revenue is recognized in the period the
services are provided.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not required.
Item 4. Controls and Procedures
Evaluation of disclosure controls and procedures.
The Company’s management, with the participation of the Company’s principal executive officer and principal financial officer,
respectively, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e)
and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on
such evaluation, the Company’s principal executive officer and principal financial officer, respectively, have concluded that, as of
the end of such period, the Company’s disclosure controls and procedures are effective.
Changes in internal control over financial reporting. There has been no change in the Company’s internal control over financial
reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the 1934 Act) during the first quarter of fiscal 2013 that has materially
affected, or is reasonably likely to materially affect, our internal control over financial reporting.
19
Table of Contents
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
In July 2012, a claim was made against the Company seeking payment of an "exclusivity fee" and other expenses arising from a
proposed receivable financing and acquisition financing arrangements. The plaintiff is seeking a $500,000 fee for issuance of a term
sheet for financing which was ultimately not provided and which the Company contends was not available because the plaintiff was
unable to deliver. The amount sought appears in all respects to be an excessive penalty relative to the financing which penalties are
not generally enforced by courts. The Company believes that this particular claim is without merit and intends to vigorously defend
this action. The case and all claims are still pending; no final date has been set for trial or other adjudication.
We are not currently subject to any other legal proceedings, nor, to our knowledge, is any other legal proceeding threatened against
us. From time to time, we may be a party to certain legal proceedings in the ordinary course of business, including proceedings
relating to the enforcement of our rights under contracts. While the outcome of these legal proceedings, if any, cannot be predicted
with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of
operations.
Item 1A Risk Factors
.
Not required.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
There were no sales of unregistered equity securities in the first quarter of 2013.
Item 3. Defaults Upon Senior Securities
None
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None
20
Table of Contents
Item 6. Exhibits
Item 601 of Regulation S-K
Exhibit No.:
31.1
Exhibit
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer of the Company
31.2
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer of the Company
32.1
Section 1350 Certification by Chief Executive Officer and Chief Financial Officer
101
The following financial information from Quadrant 4 Systems Corporation’s Quarterly Report on Form 10-Q for
the quarter ending March 31, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i)
Consolidated Balance Sheets at March 31, 2013 (unauditied) and December 31, 2012; (ii) Consolidated
Statements of Income (Unaudited) for the three months ending March 31, 2013 and 2012, (iii) Consolidated
Statements of Cash Flows (Unaudited) for the three months ending March 31, 2013 and 2012
21
Table of Contents
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
QUADRANT 4 SYSTEMS CORPORATION
May 13, 2013
By:
/s/ Dhru Desai
Dhru Desai
Chief Financial Officer and Director
22
Table of Contents
Exhibit 31.1
CERTIFICATIONS
I, Nandu Thondavadi, Chief Executive Officer of Quadrant 4 Systems Corporation certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Quadrant 4 Systems Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with
respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in
all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented
in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated Subsidiaries, is made known to
us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report; and
d) Disclosed in this report any changes in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing
the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: May 13, 2013
/s/ Nandu Thondavadi
Nandu Thondavadi
Chief Executive Officer and Director
Exhibit 31.2
CERTIFICATIONS
I, Dhru Desai, Chief Financial Officer of Quadrant 4 Systems Corporation, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Quadrant 4 Systems Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with
respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in
all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented
23
Table of Contents
in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such
evaluation; and
d) Disclosed in this report any changes in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing
the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: May 13, 2013
/s/ Dhru Desai
Dhru Desai
Chief Financial Officer
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Quadrant 4 Systems Corporation (the “Company”) on Form 10-Q for the first quarter
ending March 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Nandu
Thondavadi, Chief Executive Officer and I, Dhru Desai, Chief Financial Officer of the Company, each hereby certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
of the Company.
May 13, 2013
By:
/s/ Nandu Thondavadi
Nandu Thondavadi
Chief Executive Officer and Director
24
Table of Contents
May 13, 2013
By:
/s/ Dhru Desai
Dhru Desai
Chief Financial Officer and Director
25